Las Vegas Sun

October 1, 2014

Harrah’s to unveil $200 million expansion

It's difficult to distill a corporate strategy down to a single word.

But if you were to do it with Harrah's Entertainment, the word would be "focus."

As it embarked on a $200 million expansion of its flagship Las Vegas resort, Harrah's remained focused on providing its primary market -- affluent and leisure-oriented Baby Boomers -- with an entertaining vacation experience.

And on the eve of the official opening of the "new" Harrah's Las Vegas, it seems to have hit the target. A midday walk through the bright new casino Tuesday revealed a near-capacity crowd abuzz with the sounds that signal a smooth-running resort and a lot of satisfied customers.

It has been that way since mid-September, said Harrah's Las Vegas Senior Vice President Thom Hall, even though the final touches on the renovation project won't be completed until the end of the year.

"We've really seen business volume pick up as our customers began coming back," he said. "Last weekend we had record slot play."

That's added good news for a company that reported record third-quarter revenue Tuesday, even though construction disruptions at the Las Vegas property were largely responsible for an overall 5.1 percent decline in cash flow.

The construction included a new 35-story hotel tower that boosts the number of rooms to nearly 2,700, a new facade, six new restaurants, 30,000 square feet of new gaming space, a fitness center and spa and an outdoor entertainment and retail area called Carnaval Court.

Carnaval Court will be the center of the grand opening festivities Thursday, with aerialist Tino Wallenda attempting a high-wire walk -- sans safety net -- along a one-inch diameter, 139-feet long steel cable stretching 99 feet above the Strip.

The Wallenda attempt begins at 5 p.m. and will be followed by a private performance for invited guests by entertainer Harry Connick Jr. By early next month, Harrah's will begin offering Carnaval Fantastique, a 25-minute show featuring strolling performers repeated six times each evening.

Harrah's spent $31 million on the top three of its six new restaurants -- the Range Steakhouse; Adreotti's, offering Italian cuisine in a Tuscan Hills decor; and Asia, featuring Thai, Indian and Japanese fare.

The elegant restaurants, upscale decor and high-end amenities of the new Harrah's are in keeping with its plan to keep pace with the changing face of Las Vegas.

"Harrah's was very successful by focusing on gaming for many years," Hall said. "But as the typical Las Vegas customer profile has changed, we realized we had to expand the amenities we offered to provide an atmosphere with an upscale international flavor and more than simply gambling."

The company's Total Gold player-rewards program has enabled it to build one of the industry's most comprehensive databases tracking customer gaming preferences and spending habits.

"We know from our research that we're getting only 15 percent of the more than $200 million annually that loyal Harrah's customers from Atlantic City, Joliet, Lake Tahoe, Reno and elsewhere spend in Las Vegas," Hall said.

"We just didn't have the products and services here to provide what they wanted in the past. That's why we added the VIP touches here."

Those touches won't scare off Harrah's regulars accustomed to getting high quality at affordable prices. Hall said the company expects the average daily rate on hotel rooms to range from $66 to $69 through 1998, which should help Harrah's reach its targeted full-year occupancy rate of 95 percent.

The Total Gold program, which awards players points for action at any of Harrah's 16 properties, will help keep the rooms full, as well.

"We'll be able to 'comp' people up front, based on their play elsewhere, and not have to wait until we see what they do here," Hall said. "The points can be spent here, just like any other currency."

Harrah's prime Strip location, within walking distance of Treasure Island, The Mirage, Caesars Palace, Bally's and the Imperial Palace, as well as future resorts such as Bellagio, Paris and Venetian, is one of the property's greatest assets, he said.

To exploit it, Harrah's will spend $3 million advertising in Southern California over the next seven months, emphasizing that customers don't have to spend more on rooms just to see the Forum Shops or the Mirage's volcano.

Hall has a rich executive background in the gaming-and-lodging business and spent two years in Atlantic City as Harrah's vice president of gaming operations before moving back to Las Vegas to oversee the new Harrah's.

"This is a totally different market than Atlantic City," he said. "This is an international destination resort area, whereas Atlantic City is a regional day-trip market.

"Because Las Vegas offers so much more, the pace of gambling is a little more leisurely here."

It will be that way at the new Harrah's, because there's so much more to do.

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